lecture02

lecture02 - Properties of Internet 1 Learning Objectives 1....

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1 Properties of Internet
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2 Learning Objectives 1. Describe the ten properties of Internet 2. Describe the eight unique features of E- commerce technology 3. Understand Michael Porter’s five forces of framework 4. Understand the impact of internet on the five forces
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3 Determinants of Firm Performance
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4 Properties of Internet 1. Mediating Technology – interconnect parties that are interdependent or want to be. Can be firm to consumers or within firms. Think of its functionality like bank or TV media 2. Universality – ability to reach everyone across the globe
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5 Properties of Internet 3. Network Externalities/effect – when technology becomes more valuable if more people take advantage of it 4. Distribution Channel – distribution of digital products or information Replacement effect – serve the same customers Extension effect – bring in new customers
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6 Properties of Internet 5. Time Moderator – no temporal restriction 6. Information Asymmetry Shrinker – Information asymmetry exist when one party of the transaction has information that the other does not
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7 Freakonomics : Steven D. Levitt and Stephen J. Dubner’s book Information is the currency of the Internet. As a medium, the Internet is brilliantly efficient at shifting information from the hand of those who have it into the hands of those who do not. the information existed but in a woefully scattered way. (In such instances, the Internet acts like a gigantic horseshoe magnet waved over an endless sea of haystacks, plucking the needle out of each one.) The Internet has accomplished what no consumer advocate could: it has vastly shrunk the gap between the experts and the public. Car buying guide: http://www.edmunds.com
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8 Properties of Internet 7. Infinite Virtual Capacity– Moore’s law applicable to storage and network technologies 8. Low Cost Standard – formation Easy Adoption – same communication protocol Lower cost – lower than proprietary EDI
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9 Properties of Internet 9. Creative Destroyer – innovation unleashes a force that creates new businesses and destroys, over and over 10. Transaction Cost* Reducer *a transaction cost is a cost incurred in making an economic exchange For example, to purchase the banana, your costs will be not only the
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This note was uploaded on 01/28/2011 for the course IELM 120 taught by Professor Fu,qi during the Spring '09 term at HKUST.

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lecture02 - Properties of Internet 1 Learning Objectives 1....

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